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Posts Tagged ‘taxes’
August 6th, 2018 at 3:41 pm
Image of the Day: Private Investment Skyrocketing Following November 2016 Election, Tax Cuts
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A helpful image of the day, comparing private investment during the final two years of the Obama Administration to the immediate aftermath of the November 2016 election, and even more the tax cuts enacted one year later:

Cut Taxes, Watch Investment Skyrocket
August 2nd, 2018 at 12:48 pm
Even Leftist Economist and Clinton Administration Adviser Admits Need to Index Capital Gains Taxes for Inflation
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The Trump Administration is contemplating a move to improve the way the federal government taxes capital gains by indexing rates for inflation, which amounts to a de facto tax cut.

It’s a no-brainer in terms of fairness and efficiency, as illustrated by the fact that even leftist economist and former Clinton Administration adviser Alan Blinder acknowledges the need for it today in The Wall Street Journal:

Why index gains?  Suppose you own a stock for many years, during which time overall prices have doubled because of inflation.  Over the holding period, the value of your stock has also doubled.  When you sell, the proceeds have precisely the same purchasing power as the original purchase.   There’s no gain, no loss.  But under current tax law, you owe taxes on the phantom ‘gain.’   Worse, if your stock went up by less than the cumulative inflation, you’ll still get taxed despite your loss.  This is unfair and dysfunctional.”

We’ll admit that it’s amusing to see a man who played the role of cheerleader for Barack Obama, who openly circumvented the Constitution and legislative process using his “pen and phone” to enact policy, demand that Trump refrain from making the change and instead allow Congress to act.  Nevertheless, we’ll gladly celebrate his support for the underlying need for change.

July 17th, 2018 at 11:28 am
CFIF Praises IRS Decision to Eliminate “Schedule B” Donor Information Filing Requirement
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ALEXANDRIA, VA – In welcome news, the U.S. Treasury Department and Internal Revenue Service (“IRS”) announced yesterday evening that the IRS will finally cease requiring certain nonprofit organizations to file “Schedule B” forms that list sensitive personal information like the names, addresses and other identifying information about private citizens who donate to those organizations.

In response, Center for Individual Freedom (“CFIF”) President Jeffrey Mazzella issued the following statement:

“As many Americans are all too aware, recent years have witnessed an increase in assaults against our First Amendment freedoms of speech and association.  In some cases, the IRS has collected and leaked private information on contributors to 501(c) nonprofit organizations contained in mandatory Schedule B forms that by law were to remain confidential.  And across America, hyper-partisan government state-level officials have demanded Schedule B forms and confidential donor information contained therein as part of their campaign to harass organizations and donors with whom they disagree politically.

“With this announcement, the IRS and Treasury are acting on the acknowledgment that Schedule B information is irrelevant to its handling of tax filings, and serves no substantive purpose. In this era of persecution of private citizens for their political beliefs, together with the IRS’s admission that it can’t guarantee the confidentiality of the information contained on the Schedule B, this decision is welcome news.

“We at CFIF applaud the Trump Administration Treasury Department and IRS for their leadership and doing the right thing by eliminating the Schedule B form filing requirement for many nonprofit 501(c) organizations.”

CFIF has spearheaded the broad conservative and libertarian coalition to eliminate the Schedule B from filing requirement, including, among other efforts, coordinating a letter to President Trump and Treasury Secretary Steven Mnuchin earlier this year signed by more than 60 influential organizations and individuals urging executive action to accomplish that end.

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May 4th, 2018 at 1:25 pm
Holman Jenkins on the Return to FCC Sanity Under Chairman Ajit Pai
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From the always-insightful Holman Jenkins of The Wall Street Journal in his latest “Business World” commentary:

Mr. Pai, chairman of the Federal Communications Commission, cares about good policy.  That hasn’t been the rule for years.  During the Obama era, tech and telecom policy were driven by White House interest in whipping up millennials and exploiting public hostility to cable providers.”

January 23rd, 2018 at 11:42 am
Myth Versus Fact: Paying “Fair Share” of Taxes
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Are wealthier Americans paying their “fair share” of taxes?

No.  Assuming that one measures “fair share” as a rough equivalency between income earned and income taxes paid, wealthy Americans pay far more than their fair share, as helpfully illustrated by the Tax Foundation:

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Fair Share?

"Fair Share?"

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January 17th, 2018 at 1:07 pm
Image of the Day: Myth Versus Fact Regarding Corporate Profits
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An instructive myth-versus-fact visual when it comes to public assumptions regarding corporate profits, courtesy of AEI:

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Myth Versus Fact:  Corporate Profits

Myth Versus Fact: Corporate Profits

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December 27th, 2017 at 5:37 pm
Ramirez Cartoon: National Disgrace
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

November 8th, 2017 at 4:44 pm
The Highest State Income Tax In The Nation
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

October 30th, 2017 at 11:52 am
Image of the Day: More Freedom, More Growth
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We’ve often highlighted the direct statistical relationship between economic freedom and prosperity, but typically the comparison is between countries.  Courtesy of Adam Millsap of George Mason University’s Mercatus Center, however, we can visualize the same freedom/prosperity relationship among individual U.S. states.

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More Freedom, More Growth

More Freedom, More Growth

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To paraphrase Dr. John Lott, more freedom, more growth.

September 18th, 2017 at 12:19 pm
Great News: Americans Overwhelmingly Oppose Internet Sales Tax 66% to 21%
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For a long list of reasons that we’ve consistently highlighted, an internet sales tax allowing state authorities to tax people and businesses far beyond their borders is a destructive, indefensible idea.

On that front, there’s great news to report.  According to a fresh Rasmussen survey, this is one of those encouraging areas where fairness, policy wisdom and public opinion are in accord:

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A majority of Americans do at least some shopping online, and they are not fans of taxing those purchases.  A new Rasmussen Reports national telephone and online survey finds that 66% of American adults oppose a sales tax in their state on items purchased online, even if the store they buy from is not in their state.  Just 21% favor an internet sales tax, while 13% are not sure.”

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As much-needed comprehensive tax reform negotiations begin in Washington, some are advocating allowing an internet sales tax under the false banner “Marketplace Fairness Act” as part of the deal.  It’s encouraging to see that American voters aren’t buying it, no pun intended.

September 11th, 2017 at 2:52 pm
Free Market Groups Urge Support for “Free File Permanency Act”
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The Center for Individual Freedom (CFIF) last week joined with nearly 20 free-market organizations to urge support for H.R. 3641, the Free File Permanency Act.

The letter, which was organized by Americans for Tax Reform, was addressed to House Ways and Means Tax Policy Subcommittee Chairman Peter Roskam (R-IL).

Read the letter here.

September 7th, 2017 at 10:37 am
CFIF Joins Coalition of Conservative Orgs Urging Congress to Pass Pro-Growth Tax Reform
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The Center for Individual Freedom (“CFIF”) yesterday joined with more than 20 leading conservative organizations on a letter urging Congress to pass historic, pro-growth tax reform.

The letter, which was organized by American Action Network’s Middle-Class Growth Initiative, reads in part:

“The outdated U.S. tax code, last overhauled more than three decades ago, has rendered American job creators less competitive in the global marketplace, slowed the growth of wages, and discouraged investment in local communities across our country. We write to urge you to support meaningful, transformative tax reform that will strengthen economic growth and enable greater prosperity for America’s job creators and middle-class families.”

Read the full letter here.

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May 8th, 2017 at 2:31 pm
New Poll: Americans Supportive of Trump Tax Proposals
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As we move forward on President Trump’s tax reform proposal, which we highlighted in our latest Liberty Update, there’s encouraging news to report.  According to Rasmussen Reports, Americans are so far supportive.

By a 46% to 32% margin, Americans support Trump’s proposal to repeal the unfair “death tax,” and by a 48% to 30% margin agree that tax cuts help the economy.  Voters are also receptive to the plan “to eliminate most income tax deductions in exchange for a higher standard deduction,” which will simplify the code and benefit Americans in the lower filing brackets.

So there’s popular momentum, and now it’s up to Congress to finally get this done.

May 4th, 2017 at 12:09 pm
Melloan: High U.S. Corporate Tax Rate Has Undermined Our Economic Dominance
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This week, we highlight how Donald Trump’s new tax outline offers a remarkably excellent framework for reigniting our economy, increasing prosperity for all Americans and making the U.S. more globally competitive.

Among other things, we note how the U.S. continues to suffer the industrialized world’s highest corporate tax rate, which Trump proposes to slash from 35% to 15%, better than the developed world average of about 25%.  In The Wall Street Journal, former deputy editor and global affairs expert George Melloan observes how our unsustainably high corporate rate has slowly eroded America’s former economic dominance:

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The slow economic growth in the U.S. over the past decade has resulted not from what the world has done to America but what America has done to itself, according to a Council on Foreign Relations study “How America Stacks Up.”  It says that the U.S. ‘depends far more on the global economy than it did two decades ago, and international trade and foreign investment are increasingly vital to the U.S.’  It also finds that while the U.S. national economy remains by far the world’s dominant one, it has grown less so over that period.

One big reason is that ‘though the United States once had among the lowest corporate tax rates in the industrialized world it now has the highest.’  As the study confirms and Republican  tax reformers in Congress understand, those high rates are not big revenue producers because multinationals choose not to bring home their overseas earnings for the IRS to grab.”

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This captures again how critical it is that we finally achieve major tax reform for the first time since Ronald Reagan’s presidency, and stop the slow erosion of economic superiority that our crippling corporate tax code has caused.

April 27th, 2017 at 3:01 pm
Image of the Day: Americans Pay More On Taxes Than Food, Housing & Clothing Combined
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Today’s eye-opening Image of the Day, courtesy of the Tax Foundation:

Americans Tax Burden

Americans' Tax Burden

April 17th, 2017 at 1:37 pm
Image of the Day: How Your Federal Tax Dollars Are Now Spent
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Today’s image of the day, courtesy of The Wall Street Journal, how $100 of your federal taxes are now allocated by the government:

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Federal Spending Allocation

Federal Spending Allocation

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For perspective (see image below), that means that military spending has declined an alarming 22.3% since just 2011.  In contrast, since 2011 Social Security spending is up 17%, Medicare is up 15.1%, Medicaid is up 25.4%, civilian federal retirement is up 11.3%, education is up 5.3% and interest payments are up 1.8%.  Something to consider as important budget and spending battles heat up…

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2011 Comparison

2011 Comparison

February 15th, 2017 at 5:21 pm
The Tax Code Isn’t Working for America
There’s perhaps no greater defining mark of American politics today than the polarization that plagues our discourse.  Acrimony has become the default posture of the major political parties and their supporters on even the most mundane issues.

But there is one issue—a major issue—that holds enormous bipartisan potential, despite the political animus:  the need for comprehensive tax reform.  Yes, disagreement naturally exists over some of the details on how to reform the tax code, but few argue against the need and urgency to do so.

The U.S. tax code is almost surreal in its complexity, making it impossible for most people and businesses to prepare their own returns. Roughly 70% of Americans rely on some form of paid assistance with their taxes, and the tax preparation industry is forecast to generate an incredible $11 billion in revenues in 2018. That’s a lot of money that could be better spent in productive ways in the real economy.

Small businesses, in particular, bear the brunt of the tax code’s many problems, creating significant and ongoing drag on our economy.  And all U.S. businesses have to contend with a growth-killing 35% corporate tax rate, the highest among OECD countries.

Today, most businesses’ competitors reside not just next door and down the street, but across the globe.  It’s no wonder why most of America’s global competitors have been cutting corporate tax rates for many years—to make it easier for their businesses to compete in the global marketplace. With its enormous complexity and sky-high rates, the U.S. tax code, meanwhile, actively stifles growth, entrepreneurship, innovation, investment and job creation.

The current tax code is broken. It must be simplified and set fair rates for businesses of every size. Only when this happens will the United States once again be the best place in the world to start and run a business.

The time for tax reform is now!

November 8th, 2016 at 11:35 am
Good News, Regardless of Election Outcome: Tax Relief Likely
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Regardless of today’s election outcome, here’s an encouraging headline buried deep on Page C 8 of this morning’s Wall Street Journal:  “Tax Relief Is Likely No Matter Who Wins.”

As we at CFIF have long emphasized, the U.S. continues to suffer the developed world’s highest corporate tax rate.  In addition to suffocating domestic growth and imposing needless tax complexity on American businesses, our outdated corporate tax code also explains why corporations are forced to relocate headquarters overseas in order to survive in an increasingly competitive global marketplace.  Speaker Paul Ryan has unsurprisingly offered admirable intellectual and political leadership in promoting reform, and the good news is that oven liberals like Barack Obama understand the need for cutting rates and reducing complexity.

Accordingly, it’s refreshing regardless of one’s political leanings to read the Journal’s take:

No matter the outcome of Tuesday’s election, American companies with substantial overseas earnings, and their investors, could emerge as big winners.  Corporate tax reform that would make it easier for U.S. firms to repatriate foreign earnings has emerged as a rare issue of bipartisan consensus in Washington.  Progress on this issue is possible no matter who controls the White House and Congress next year…  Under current law, American companies with overseas earnings pay no U.S. federal tax on these profits unless and until they repatriate the money, at which time they pay the relatively high corporate tax rate of 35%.  This creates a perverse incentive for U.S. companies to house money abroad rather than reinvest it at home…

Even in a divided-government scenario, for example, with Mrs. Clinton as President and a Republican-controlled Congress, it seems likely that companies can look forward to a one-time break on repatriated earnings and a lower tax rate going forward.”

And as the Journal notes, the positive effect would likely be substantial:

The last time there was such a repatriation tax holiday was in a law passed in 2004, and the effects were dramatic.  Companies brought home $299 billion of overseas earnings in 2005, up from $82 billion the previous year, according to the Bureau of Economic Analysis.”

Far preferable to a mere one-time repatriation tax holiday would be a permanent reduction in the corporate tax rate below the developed worldwide average around 20%, and removal of Byzantine complexity.  Regardless, the likelihood of tax reform whoever wins tonight offers welcome news as an oftentimes bleak election concludes.

October 26th, 2016 at 11:59 am
Begrudgingly Celebrating the 30th Anniversary of the Tax Reform Act of 1996
Entrepreneurs and small businesses are being crushed by an outdated, confusing and counter-productive tax code. And businesses aren’t the only ones being squeezed.  The United States has the highest business tax rate in the world, which is costing American families $3,000 per year in spending power.

Yet despite these challenges, last week marked a staggering 30 years since Congress last passed major tax reform.

Working together, the next president and Congress can deliver for America’s taxpayers by simplifying the tax code and setting a fair business rate of no higher than 25 percent within the first 100 days.

It’s time for Congress to get to work!

October 19th, 2016 at 12:39 pm
In Tonight’s Debate, Voters Deserve to Hear More About Economic, Tax Policies
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Tonight, millions of Americans will tune into the final Presidential debate between Donald Trump and Hillary Clinton.  Among the central topics should be the economy, which recent polling shows remains voters’ foremost concern.

Unfortunately, voters haven’t heard enough from either candidate on that topic during the first two debates.

Which is tragic, because this election itself has taken a toll on the economy.  According to a recent poll of economists, rhetoric from both campaigns has had a negative impact on economic growth over the past few months.  Accordingly, rather than continuing to argue about personal issues and mutual animosities, both candidates must do a better job of improving economic optimism and confidence by advocating pro-growth policies that will help us proper.

And in that vein, perhaps no issue merits focus more than comprehensive tax reform.

During the first debate, taxes and potential plans received brief discussion.  Both candidates agreed that a significant problem exists with companies moving to other countries and protecting their earnings abroad from excessive U.S. taxes. Trump correctly pointed out that the reason many companies leave is that our corporate rate remains the highest in the developed world.  Indeed, a recent Mercatus Center study highlighted how the increasing number of corporate inversions result from that inglorious distinction, and how lowering the rate will go a long way toward keeping American companies here so that they can create jobs and generate tax revenues domestically rather than abroad.

But more discussion and detail is critical.  Over thirty years ago, on September 26, 1986, the Senate began debate over comprehensive tax reform legislation that the House of Representatives had approved.  Incredibly, our tax code has not been reformed in a meaningful manner during the ensuing 30 years despite tectonic evolution of the U.S. economy during that time period.  It’s therefore past time to modernize the code and reformed so as to help American businesses of all sizes, rather than continuing to hinder growth and opportunity.

And on that point, we need concrete plans from Mr. Trump and Secretary Clinton.

Demonstrating his own commendable leadership on this critical matter, Speaker of the House Paul Ryan recently stated that tax reform is his top priority in 2017.   He rightly explained that the first thing that needs to be accomplished next year is “a budget that gets tax reform, that gets this debt and deficit under control.”   Clearly, Speaker Ryan realizes that the American people welcome discussion about how the federal government can actually enact policies beneficial to the economy and their own individual finances.  Whoever enters the White House this coming January must work with Congress to reform our tax code as soon as possible, which is precisely why we need to hear their ideas on how to best accomplish that.

To his credit, Trump has proposed a tax reduction for all businesses from 35 percent to 15 percent.  And to her credit, Clinton acknowledges that lowering the corporate rate would encourage companies to repatriate funds stranded overseas.  That’s obviously a step in the right direction, but the American people need to hear more specifics – a simplified code and lower rate, in particular – and a timeline for when they plan to enact that type of reform.  While their rhetoric on the issue is occasionally encouraging, voters must learn which candidate will work to fix the tax code in order to improve our economy the fastest.

This election has obviously been among the most contentious in our nation’s history, and policy has too often taken a back seat to personality.  While that may at times provide shallow entertainment, it’s time to put the personal attacks aside and hear more about both candidates’ visions for the economy.  Hopefully, that will mean devoting more time toward discussing tax reform and economic growth, not bickering over issues that ultimately has little impact on Americans’ everyday lives and needs.